Rep. Ron Stephens, a Republican from Savannah, is a 16-year member of the Georgia House. With a colloquial tongue, he calls the film incentive in Georgia his “baby” and says of naysayers: “I break their arms and legs and make them understand that's not the proper way to go.”

Georgia has dug in its heels to become a movie-making mecca – not only drawing Hollywood to the South but planting its roots there, too. Since 2010, 11 film and television studio facilities have made announcements to locate or expand in Georgia.

The state even awards an additional 10 percent tax credit – on top of 20 percent – if a production company imbeds the signature Georgia peach logo. Unlike in North Carolina, where there is a $1 million per-person cap, there are no spending limits in Georgia on big items such as talent, allowing the state to draw high-paying actor gigs including “The Hunger Games.”

Seven years ago, Stephens said, the filming industry was generating about a $200 million economic impact in the state. Last fiscal year, the state topped the $3 billion mark, he said. That's billion with a “B,” he said, to drive the point home.

‘A different brand'

So why can't North Carolina be more like Georgia?

As in North Carolina, Georgia is run by Republicans, though the film industry in that state is on much more solid footing than it is here. Stephens said there are some legislators who are concerned the incentive is a “gimme” to Hollywood. Education is key to swaying public opinion, he said, including studio tours and events.

Tim Bourne, of Wilmington, a producer who has worked in Georgia and North Carolina, said North Carolina is a different brand of conservative.

“Why was North Carolina one of the last to have a lottery? It's just the mindset of our state, I think. Apparently North Carolina is much more conservative than Georgia. There's no fiscal reason,” Bourne said. “North Carolina is not smarter than Georgia. North Carolina doesn't know something that Georgia doesn't.”

For another thing, Georgia's film incentive doesn't include a sunset provision, unlike in North Carolina, which brings uncertainty each time it's up for renewal in the General Assembly. That's particularly true now with Republicans at the helm and tax reform on their minds.

North Carolina's film incentive remains on the books through Dec. 31, 2014. Without legislative action, it will expire the following day.

Holding ground

Film industry representatives would love to have seen North Carolina's film tax credit extended by lawmakers during the long legislative session that just ended.

But as state leaders considered one of the nation's most comprehensive tax overhauls, the focus turned toward keeping the film incentive intact – period – as in making sure it wasn't wiped from the books. Some Republicans in the N.C. General Assembly oppose incentives altogether, favoring instead lower taxes that level the playing field.

“The real takeaway here is thank goodness nothing happened this session, because there were two very open attacks on the film incentive this year,” said Rep. Susi Hamilton, D-New Hanover.

One of those “attacks” was legislation introduced by two local legislators – Reps. Rick Catlin and Chris Millis – to rewrite the incentive in a way that the film industry said would result in the loss of productions. The other was an amendment offered in a House committee to the massive tax overhaul package that died narrowly on a tie vote.

Millis, of Pender, and Catlin, of New Hanover, said they were addressing a constitutional concern with the incentive.

The N.C. Institute for Constitutional Law published a report questioning the constitutionality of the film incentive package as it is currently structured. The report by Executive Director Jeanette Doran said: “The error of North Carolina's film incentives rises to a constitutional infirmity because no appropriation has authorized the drawing of public money for payments of these subsidies.”

Currently, if credits allowed under the state's film incentives package exceed the amount of taxes the production company owes to the state, the state writes a check to the company for the difference. The Catlin/Millis bill would have eliminated that and instead waived any tax liability the company accrued over five years up to the credit limit.

Since most film companies have no tax liability in North Carolina, that would have killed any financial incentive to film here, industry supporters said.

The bill never moved, but midway through session, as tax talks heated up, Senate President Pro Tempore Phil Berger forecast the film credit's uncertainty.

“The film incentive and other incentives are going to be part of that overall discussion, and we'll see how things work out.… Whether we will need a specific set-aside as opposed to just the tax reform to make North Carolina attractive, I think that's part of the discussion,” he said.

The uncertainty is new with Republicans in charge. The incentives were beefed up by the Democratic-controlled legislature in 2010 to include allowing film companies to recoup 25 percent of their qualifying expenses. Prior to this juicing, the film industry here was languishing.

But support for the film incentive has been bipartisan. Commerce Secretary Sharon Decker, a high-profile member of Gov. Pat McCrory's team, has expressed support.

Shopping for a deal

Leveling the playing field may be well and good, but the film industry says the ballgame isn't played without incentives. Competition among states is too stiff, and movie and television show makers will go with the best deal.

“We hope North Carolina moves along its path of eliminating its film incentive so it helps Georgia,” Stephens said.

He's not afraid to throw down fightin' words.

“We didn't have a studio big enough for ‘Iron Man 3,' but that's going to change. It would have been right here had we had a film studio big enough,” he said.

No one is more aware of what's at stake than Aaron Syrett. “We're looking at what we can do right now,” says the director of the N.C. Film Office.

The Friday the legislative session ended, Syrett said, his phone rang. It was a studio representative who had heard an extension was not granted and the film incentive was going away.

Costly uncertainty

Syrett said a plan of attack is in the works to persuade lawmakers to extend the incentives. Still, in an industry that deals in concrete certainty, he said, “we can only offer you certainty up to this date.”

When it comes to the movie industry, it's a cutthroat game of the best deal offered. In the early 2000s, Canada was getting the lion's share of motion pictures by ponying up both federal and provincial incentives. But states woke up when the movie “Chicago” was done at a sound stage in Toronto. Now, it's a game of who offers the best package, said Vans Stevenson, a senior vice president with the Motion Picture Association of America, based out of Washington, D.C. He said the industry is closely watching the N.C. General Assembly.

“North Carolina, and Charlotte and Wilmington in particular, have that opportunity, but without a stable incentive program those opportunities will likely not be there, and in fact there are opportunities that are being lost as we speak since the legislature did not extend the credit beyond the sunset date of Dec. 31, 2014,” he said.

“Unfortunately, without a stable and predictable program, you're going to take certain film and finance people who look at this ... and they're just going to go somewhere else. You're shopping for the best environment.”

And the environment is ripe in Georgia, he said.

“Georgia is really realizing the benefits of a constant, stable policy designed to facilitate the development of significant infrastructure creating huge investments and creating thousands of jobs in television and motion picture production,” he said.

<p>The Economic and Tourism Committee chair in the Georgia House says it would be just peachy if North Carolina does away with its film incentive. </p><p>Rep. Ron Stephens, a Republican from Savannah, is a 16-year member of the Georgia House. With a colloquial tongue, he calls the film incentive in Georgia his “baby” and says of naysayers: “I break their arms and legs and make them understand that's not the proper way to go.” </p><p>Georgia has dug in its heels to become a movie-making mecca – not only drawing Hollywood to the South but planting its roots there, too. Since 2010, 11 film and television studio facilities have made announcements to locate or expand in Georgia.</p><p>The state even awards an additional 10 percent tax credit – on top of 20 percent – if a production company imbeds the signature Georgia peach logo. Unlike in North Carolina, where there is a $1 million per-person cap, there are no spending limits in Georgia on big items such as talent, allowing the state to draw high-paying actor gigs including “The Hunger Games.” </p><p>Seven years ago, Stephens said, the filming industry was generating about a $200 million economic impact in the state. Last fiscal year, the state topped the $3 billion mark, he said. That's billion with a “B,” he said, to drive the point home.</p><h3>'A different brand'</h3>
<p>So why can't North Carolina be more like Georgia? </p><p>As in North Carolina, Georgia is run by Republicans, though the film industry in that state is on much more solid footing than it is here. Stephens said there are some legislators who are concerned the incentive is a “gimme” to Hollywood. Education is key to swaying public opinion, he said, including studio tours and events. </p><p>Tim Bourne, of Wilmington, a producer who has worked in Georgia and North Carolina, said North Carolina is a different brand of conservative. </p><p>“Why was North Carolina one of the last to have a lottery? It's just the mindset of our state, I think. Apparently North Carolina is much more conservative than Georgia. There's no fiscal reason,” Bourne said. “North Carolina is not smarter than Georgia. North Carolina doesn't know something that Georgia doesn't.” </p><p>For another thing, Georgia's film incentive doesn't include a sunset provision, unlike in North Carolina, which brings uncertainty each time it's up for renewal in the General Assembly. That's particularly true now with Republicans at the helm and tax reform on their minds. </p><p>North Carolina's film incentive remains on the books through Dec. 31, 2014. Without legislative action, it will expire the following day.</p><h3>Holding ground</h3>
<p>Film industry representatives would love to have seen North Carolina's film tax credit extended by lawmakers during the long legislative session that just ended. </p><p>But as state leaders considered one of the nation's most comprehensive tax overhauls, the focus turned toward keeping the film incentive intact – period – as in making sure it wasn't wiped from the books. Some Republicans in the N.C. General Assembly oppose incentives altogether, favoring instead lower taxes that level the playing field.</p><p>“The real takeaway here is thank goodness nothing happened this session, because there were two very open attacks on the film incentive this year,” said Rep. Susi Hamilton, D-New Hanover. </p><p>One of those “attacks” was legislation introduced by two local legislators – Reps. Rick Catlin and Chris Millis – to rewrite the incentive in a way that the film industry said would result in the loss of productions. The other was an amendment offered in a House committee to the massive tax overhaul package that died narrowly on a tie vote.</p><p>Millis, of Pender, and Catlin, of New Hanover, said they were addressing a constitutional concern with the incentive.</p><p>The N.C. Institute for Constitutional Law published a report questioning the constitutionality of the film incentive package as it is currently structured. The report by Executive Director Jeanette Doran said: “The error of North Carolina's film incentives rises to a constitutional infirmity because no appropriation has authorized the drawing of public money for payments of these subsidies.”</p><p>Currently, if credits allowed under the state's film incentives package exceed the amount of taxes the production company owes to the state, the state writes a check to the company for the difference. The Catlin/Millis bill would have eliminated that and instead waived any tax liability the company accrued over five years up to the credit limit.</p><p>Since most film companies have no tax liability in North Carolina, that would have killed any financial incentive to film here, industry supporters said. </p><p>The bill never moved, but midway through session, as tax talks heated up, Senate President Pro Tempore Phil Berger forecast the film credit's uncertainty. </p><p>“The film incentive and other incentives are going to be part of that overall discussion, and we'll see how things work out.… Whether we will need a specific set-aside as opposed to just the tax reform to make North Carolina attractive, I think that's part of the discussion,” he said. </p><p>The uncertainty is new with Republicans in charge. The incentives were beefed up by the Democratic-controlled legislature in 2010 to include allowing film companies to recoup 25 percent of their qualifying expenses. Prior to this juicing, the film industry here was languishing. </p><p>But support for the film incentive has been bipartisan. Commerce Secretary Sharon Decker, a high-profile member of Gov. Pat McCrory's team, has expressed support.</p><h3>Shopping for a deal</h3>
<p>Leveling the playing field may be well and good, but the film industry says the ballgame isn't played without incentives. Competition among states is too stiff, and movie and television show makers will go with the best deal. </p><p> “We hope North Carolina moves along its path of eliminating its film incentive so it helps Georgia,” Stephens said. </p><p> He's not afraid to throw down fightin' words. </p><p>“We didn't have a studio big enough for 'Iron Man 3,' but that's going to change. It would have been right here had we had a film studio big enough,” he said. </p><p>No one is more aware of what's at stake than Aaron Syrett. “We're looking at what we can do right now,” says the director of the N.C. Film Office. </p><p>The Friday the legislative session ended, Syrett said, his phone rang. It was a studio representative who had heard an extension was not granted and the film incentive was going away. </p><p>“The news is in Los Angeles,” Syrett said. “The damage is already done.”</p><h3>Costly uncertainty</h3>
<p>Syrett said a plan of attack is in the works to persuade lawmakers to extend the incentives. Still, in an industry that deals in concrete certainty, he said, “we can only offer you certainty up to this date.” </p><p>When it comes to the movie industry, it's a cutthroat game of the best deal offered. In the early 2000s, Canada was getting the lion's share of motion pictures by ponying up both federal and provincial incentives. But states woke up when the movie “Chicago” was done at a sound stage in Toronto. Now, it's a game of who offers the best package, said Vans Stevenson, a senior vice president with the Motion Picture Association of America, based out of Washington, D.C. He said the industry is closely watching the N.C. General Assembly. </p><p>“North Carolina, and Charlotte and Wilmington in particular, have that opportunity, but without a stable incentive program those opportunities will likely not be there, and in fact there are opportunities that are being lost as we speak since the legislature did not extend the credit beyond the sunset date of Dec. 31, 2014,” he said. </p><p>“Unfortunately, without a stable and predictable program, you're going to take certain film and finance people who look at this ... and they're just going to go somewhere else. You're shopping for the best environment.” </p><p>And the environment is ripe in Georgia, he said. </p><p>“Georgia is really realizing the benefits of a constant, stable policy designed to facilitate the development of significant infrastructure creating huge investments and creating thousands of jobs in television and motion picture production,” he said. </p><p><i></p><p>Metro desk: 343-2389</p><p>On <a href="http://www.starnewsonline.com/section/news41"><b>Twitter</b></a>: @StarNewsMolly</i></p><h3>Comparing incentives</h3>
<p><b>Georgia's incentive at a glance:</b> </p><p>> 30 percent transferrable tax credit (plus 10 percent for embedding the Georgia peach) </p><p>> $500,000 minimum spend on qualified expenditures </p><p>> All resident and non-resident labor qualify; no caps </p><p>> No sunset clause</p><p><b>North Carolina's incentive at a glance:</b> </p><p>> 25 percent refundable tax credit </p><p>> $250,000 minimum spend on qualified expenditures</p><p>> First $1 million of each resident and non-resident labor qualifies </p><p>> Sunset clause (ends Jan. 1, 2015)</p>